Nuclear power urged to beat fuel poverty

One third of all households in the UK will be in fuel poverty by 2030 unless the coalition Government rapidly moves to encourage and enable building of new nuclear plants, says a report released today.

The new report published by the Centre for Policy Studies, claims the number of homes in fuel poverty – defined as the need to spend more than 10 per cent of household income on fuel to maintain adequate warmth – could rise to nearly 8.5 million over the next 18 years, if nuclear energy generating capacity continues to fall as the Government delays approving new nuclear plants.

Last winter, coal plants shouldered nearly 50 per cent of electricity demand and the report claims the coalition does not currently have the suitable plans in place to replace old coal and oil power supplies which will close by 2016 due to European Union rules.

It claims the Government risks filling the gap with more gas-fired plants, making the UK dependent on gas for over 80 per cent of electricity generation by 2025.

Energy analyst Tony Lodge, author of the report The Atomic Clock: How the coalition is gambling with Britain’s energy policy says the Coalition must move to approve a fair and balanced nuclear power delivery strategy which rewards all new atomic power investors, as well as encouraging more energy diversification, including early delivery of new efficient and cleaner coal plants.

“Consequently, Britain’s 26 million households, who spend around £20bn a year on energy will face higher bills at a time of falling household income.”

The feared increase in fuel poverty will have a profound impact on residents across Yorkshire and the Humber where as many as 595,000 households are now projected to be living in fuel poverty, – a sharp rise from 333,000 homes in 2007.

The number equates to 26 per cent of all households in the region currently suffering fuel poverty leading to more than 2,300 deaths every winter.

Experts say the situation is now at breaking point, amid predictions that bills will continue to rise by as much as 25 per cent by 2020.

Households across rural areas of Yorkshire are bearing the brunt of the problem; latest figures show 27 per cent of homes in Ryedale, 24 per cent in Richmondshire, 23 per cent in Craven and 22 per cent in Hambleton are officially classed as being in fuel poverty.

Many of these homes are off the national gas network and need to rely on oil or liquid propane gas for heating, which can cost twice as much.

Single occupancy households, often pensioners who have lost their partner but are continuing to live in the marital home, are particularly badly affected.

Tim Knox, director of the Centre for Policy Studies, said: “Low cost, reliable and abundant energy is essential to the future competitiveness of British industry.

“It is incoherent to impose green taxes on manufacturers and then – as happened in the Autumn Statement – give money back in the form of subsidies.

“The Coalition wants to see a manufacturing-led economic recovery but this will only be forthcoming if energy prices are competitive by international standards.

“Unilateral energy taxes, delays to new generating plant and a lack of generation diversity will drive up costs.”

The coalition Government, which has set a target of eradicating fuel poverty by 2016, says it is working to fight the problem.

The Department of Energy and Climate Change says it is now requiring the big six energy companies to provide discounts of at least £120 off energy bills this winter to about 600,000 of the poorest pensioners in the country through the Warm Home Discount scheme.

The department says Ministers are also pushing for stronger competition to keep price rises as low as possible.

Demand on the UK electricity supply is expected to more than double by 2050 as the country shifts more of its transport and heating on to the electricity grid.